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122 posts

Master Geek


# 81385 12-Apr-2011 13:42
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[Apologies in advance, these are simple questions... if there's a FAQ I missed, maybe someone could point me to it!]

So last month I spent some time in the states and was rather disappointed to compare their internet experience to ours.

When I discussed our Traffic Caps - they were horrified. The notion of traffic caps is alien to Americans. I had a play with Netflix and was impressed. Can't see anything like that happening here with our current structure.

So to my very n00b question - I can understand charging for traffic coming through the SCC, but I don't know why it costs me to transfer data to my next-door neighbor, who is on the same ISP as me!

Didn't the ISPs in NZ years ago (before 2000?) differentiate between traffic rates to local vs overseas sites? What needs to be done to make in-country traffic free again?

Secondly, this is interesting. Tracert from my home connection (Telstraclear DSL) to my work (Citynet) goes through San Francisco. Is that an efficient way to run the internet?

I understand the issue with both questions is regarding Peering... I'm gonna do some research here because it strikes me that there's a bit of emperor's-new-clothes going on here.


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2460 posts

Uber Geek


  # 457818 12-Apr-2011 13:50
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ISP's actually buy their pipes in mbit/s, not by data. The data caps are in place to stop people from using up all their meager bandwidth.

The thing with it costing you "data" to transfer data between your next door neighbour (use wifi or something) is because if you're on DSL, that data needs to transit telecom's network out and then the same network back.
There's less excuse for this on an ISP that owns the DSLAMs/backhaul, but you won't see anyone offering it because it would be too much hassle. (Hassle because some of it's customers might be on ULL gear and the other customers will be on telecom wholesale gear/backhaul)

The traceroute thing is an issue with telstra not really peering with anyone in NZ.



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Master Geek


  # 457820 12-Apr-2011 13:53
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kyhwana2: The thing with it costing you "data" to transfer data between your next door neighbour (use wifi or something)


Thanks for the reply. I was using the example of transfering data to my neighbor as a metaphor - if I really wanted to transfer data to my neighbor I would use wifi or sneakernet. By "my neighbor" I meant any host within NZ generally.



 
 
 
 


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  # 457842 12-Apr-2011 14:29
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Additionally, it is not free to send data, even within New Zealand, because of the cost to keep the Fibre network (say from you in Wellington to your friend in Invercargill), etc. running well.

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Uber Geek


  # 457850 12-Apr-2011 14:44
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Ah right, well "your neighbour" still has to transit the national backbone, which if I remember costs about the same as international transit, these days. You'd still have to deal will telecom's gear/backhaull if not on ULL and even on the Orcon+ network, you'd then have to transit off Orcon's network to APE/WIX/etc or through to someone elses network that orcon still have to buy a pipe to.



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Master Geek


  # 457854 12-Apr-2011 14:47
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kyhwana2: Ah right, well "your neighbour" still has to transit the national backbone, which if I remember costs about the same as international transit, these days. You'd still have to deal will telecom's gear/backhaull if not on ULL and even on the Orcon+ network, you'd then have to transit off Orcon's network to APE/WIX/etc or through to someone elses network that orcon still have to buy a pipe to.


Understand. But... what is the fundamental difference in our business model for internet traffic vs. that in the USA? Or put another way, why is inter-ISP traffic an issue here and not there?

Or to reduce the question to its simplest form - who is making all the money?

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Uber Geek


  # 457872 12-Apr-2011 15:21
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Most of our traffic goes overseas and there's only one cable for that to go through at the moment. :)

Telstraclear and Telecom don't openly peer in NZ anymore (they used to) and they're the biggest ISPs around. (Although I think telecom will selectively peer with you if you ask them, someone from an ISP that does could chime in here)

Thanks to that, you can't just not charge for National traffic, since it might end up heading overseas and back to NZ, using up your international pipe. If you could guarantee that all national traffic stayed national and all the ISPs/hosting DC's were on board, we could probably go back to free national.

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Master Geek

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  # 457893 12-Apr-2011 15:43
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aros71: So last month I spent some time in the states and was rather disappointed to compare their internet experience to ours.

When I discussed our Traffic Caps - they were horrified. The notion of traffic caps is alien to Americans. I had a play with Netflix and was impressed. Can't see anything like that happening here with our current structure.



Ah yes, there are no traffic caps in North America...

Not quite true. See this recent (5 Apr 2011) Ars Technica article.

This reminds me of when I was told that Americans hate to stand in a line, unlike (for instance) the Brits (they said), who queue for everything. Well, the longest lines I have ever stood in were at Disneyland. Full of the same Americans who don't stand in lines. I came to admire the psychology applied at Disneyland to keep you in line. Over the extended period of time I had waiting for each ride I occupied my time by admiring the many and subtle ways they kept the crowds standing in line. A notion alien to Americans. Ahem. Anyway...

Back to the topic at hand. Note that the acceptable use policies of many North American ISPs effectively constitute data caps, and also that the Fair Trading Act in New Zealand is strict about advertising 'unlimited' unless it really is. A number of 'unlimited' overseas plans I've heard of (not necessarily any mentioned in the Ars article) would not be allowed to advertise themselves as such in New Zealand.

However, let's be fair. The US caps are much higher. There's a simple reason for that---the costs are much lower. Most traffic for US consumers is US based. There is fierce competition for longline capacity, including from players who bought up bankrupt networks at firesale prices and are thus effectively selling bandwidth below the cost it took to build the network originally.

About 80% of a NZ customer's traffic comes from overseas, delivered over a very expensive piece of cable.

And Netflix---that's one of the drivers behind the Net Neutrality debate. Personally I favour paying for my bits and leaving it at that rather than without someone deciding that some bits are more expensive/better/immoral/mandated than others.

 
 
 
 




122 posts

Master Geek


  # 457895 12-Apr-2011 15:49
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kyhwana2: Telstraclear and Telecom don't openly peer in NZ anymore (they used to) [...] If you could guarantee that all national traffic stayed national and all the ISPs/hosting DC's were on board, we could probably go back to free national.


That appears to be the heart of the problem. Some time in the past, ISPs used to Peer, but now they don't. Presumably something changed which made it more advantageous financially for them not to, seeing as companies (generally) will only do what's financially advantageous to themselves.

Does this mean our regulation is faulty?

I'm trying to understand the core problem here from a business perspective - the technical reasons seem straightforward...

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  # 457899 12-Apr-2011 15:54
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... forget US or any European country. Check out Australia.

Huge country, low population density and yet they offer huge caps for same money as in NZ. I doubt that australians generate mostly local content, in fact should be similar to NZ. Most of the traffic should be international. And they are not far closer to the rest of the world then us :(

so the question why? why australia always should be ahead of new zealand? :(




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  # 457909 12-Apr-2011 16:16
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kobiak: ... forget US or any European country. Check out Australia.

Huge country, low population density and yet they offer huge caps for same money as in NZ. I doubt that australians generate mostly local content, in fact should be similar to NZ. Most of the traffic should be international. And they are not far closer to the rest of the world then us :(

so the question why? why australia always should be ahead of new zealand? :(

Am I right in saying they have more international cables?

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Uber Geek


  # 457915 12-Apr-2011 16:27
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codyc1515: 
Am I right in saying they have more international cables?


Not really, they have the southern cross cable like we do and even if they did, there are decent cables between NZ/AU, so we could use those if aussie have "more international cables"
 

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  # 457917 12-Apr-2011 16:28
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kyhwana2:
codyc1515: 
Am I right in saying they have more international cables?


so we could use those if aussie have "more international cables"

No, because it still has to go out of our one cable to their many.

67 posts

Master Geek


  # 457918 12-Apr-2011 16:30
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*peering one problem,
*majority data from overseas
*one international cable
*population density (hardware costs)
*not enough customer base to share the cost of those who use alot of bandwidth
...

you cannot always compare what are you getting, compare how much does it cost to delivery this service/person, compare the margins maybe?

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  # 457942 12-Apr-2011 17:49
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Telstra in Australia started loosing too much market share so had to change away from a high price low volume pricing model (artifical scarcity).

This is because LLU (local loop unbundling) got started 2-3 years earlier over there so lots of big ISP's have their own gear in the exchanges, with lots of options for domestic backhaul.

In NZ when LLU was finally allowed it was too late and it clashed with the cabinet program (the cabinet program was prompted by the labour governments requirement that 80% of homes have access to 10Mbit by 2012).

However with cabinets it's not really economicly viable to have several ISP's install gear in a cabinet that only serves 300 people.  If that ISP only has a couple of customers in that area and an ISAM and line cards cost at least 50k... it's just not going to happen.

There are pro's and con's to what happened, my line rate recently went from 4Mbit to 15Mbit because of a cabinet.  The same kind of cabinet program was not undertaken in Australia by Telstra so so there are lot more people on >2km from an exchange that will never get very good speeds.

 

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  # 458257 13-Apr-2011 14:08
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Telstra have been trialing DSL regenerators but I dont remember if these ever were rolled out a few years ago.

Also Australia has a connection to the Sea-We-Mee cable? or somename like that. It runs from the UK to Japan and passes the mediteranian and india. I think Australia has a spur which connects into it.

Here is a map of undersea cables below.
In the USA you have assorted competing phone companies that connect all the cities together with fibre.
Here in NZ we have Telecom everywhere, and telstra / fx covering large parts of other areas. You basically have to pick one of the two to transit your national bandwidth.

To give you an idea on the cost of a 2mbit link between an auckland address and Napier address, telecom was going to charge $450+ per month.

Telecom and Telstra also dont peer unless you pay them.
So if you are on an isp that has a few customers, the chances are you would pull more traffic from telecoms customers than they would pull from you. So they would rather your costs be higher so they charge you. If you dont peer with them directly, then you have to route your traffic through another network that does such as FX networks, or go via the internet exchange in San Francisco.

To sum up:
In the states, you have most of the traffic staying inside the country, and heaps of cables going to other countries with heaps of market competition for both domestic and international bandwidth. ISP's peer at a large number of data centres in various cities as they know to keep costs down, they have to.

In NZ you have costly domestic bandiwdth, costly international bandwidth and only the little guys want to peer. So free national is more expensive. Most of our traffic is international.

In Australia you have a bit more domestic bandwidth from more market players, as well as a few international cables. The southern cross is a popular one they use, but there are a number of options.




Ray Taylor
Taylor Broadband (rural hawkes bay)
www.ruralkiwi.com

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For my general guide to extending your wireless network Click Here




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